City approves deal with builders

Council votes for settlement in Cypress case

The city of Wichita Falls is moving toward a settlement in a case that had been scheduled for trial later this month related to construction delays and withheld liquidated damages tied to the Cypress Water Treatment Plant.

During a special City Council meeting Thursday, council members, city staff and legal representatives met for more than an hour in executive session. Council members then took a vote on a resolution in open session. The resolution, which was approved unanimously, authorizes City Manager Darron Leiker to execute the documents necessary to settle MW Builders of Texas, Inc. v. The City of Wichita Falls; Siemens Water Technologies Corp. f/d/b/a US Filter Wastewater Group; and Biggs & Mathews Inc.

The city of Wichita Falls entered into five contracts with MW Builders of Texas Inc. for construction of the Cypress Water Treatment Facility, which houses the microfiltration and reverse osmosis water treatment operation, according to the resolution. The long-anticipated plant went online in September 2008.

The construction process saw a number of delays. According to the resolution council members approved Thursday, four of the five construction contracts — known as a group as the "membrane train contracts" dealing with the inner workings of the facility — were affected by delays. Those delays resulted in the withholding of liquidated damages.

The five contracts, including change orders, involved a total dollar amount of approximately $26 million, and they were subject to more than $2.5 million in withheld amounts and otherwise retained amounts, according to the document.

MW Builders filed several suits against the city and other parties, seeking liquidated damages, delay damages, attorneys' fees and other damages. The city won the first two actions. The third contained a contract cause of action that was not subject to judicial dismissal, according to previous Times Record News reports.

The case moved toward trial, which was scheduled to begin in 78th District Court on March 23.

The resolution approved this week describes a settlement agreement that would result in the release of the funds that had been retained as well as an additional $289,386.40, which would represent an increased amount of one percent of the total contracted amount.

In exchange for the released amount, according to a settlement between the parties, the city stands to receive new equipment worth substantially more than the $289,386.40, which should "provide substantially increased capacity and life for the City's water treatment operation."

Because litigation was still pending, city leaders could not comment Thursday on specific details of the case. The settlement documentation will go to 78th District Judge Barney Fudge for approval.

"We think it is the most cost-effective measure at this time for the taxpayers to settle this case," City Attorney Miles Risley said following Thursday's meeting. "If we didn't think it was, we wouldn't have recommended it."